Chattanooga's biggest trucking company hauled in more revenues than last year during the first quarter, but the market upheaval caused by the coronavirus pandemic has undercut shipping rates and trucking industry profits.
U.S. Xpress Enterprises, Inc., the nation's fifth largest asset-based truckload carrier by revenue, said Thursday it had an adjusted net loss of $7.2 million, or 15 cents per share, in the first three months of 2020. In the same period a year ago, U.S. Xpress reported adjusted earnings of $7.3 million, or 15 cents per share.
The results were a penny per share better than the average forecast among analysts who follow the company and sales were better than what had been predicted.
Nonetheless, shares of U.S. Xpress declined by nearly 9.2%, or 44 cents per share, in trading on the Nasdaq Exchange to lower the company's price to $4.36 per share. The company ended 2019 at $5.03 per share and a year ago the company's stock traded at $6.74 per share.
U.S. Xpress CEO Eric Fuller said 96% of the businesses served by U.S. Xpress have continued to operate this month and the company shipped more than 30,000 loads a week during March amid the coronavirus crisis. While Fuller said the truckload market had been lackluster over much of the past year, it was improving earlier this year ahead of the spread of the COVID-19 virus in the United States which has cut shipping rates as much as 10% in some markets.
"After the outbreak, during March, freight volumes and spot market pricing ramped up in response to the demand associated with consumer stockpiling and inventory restocking," Fuller said in the quarterly earnings report. "While the outlook is uncertain, we believe we are well positioned as less than 4% of our revenues were generated by customers that closed during the peak of the pandemic and we did not experience a drop off in volumes."
U.S. Xpress reported operating revenue in the first quarter of 2020 of $432.6 million, up 4.1% from the $415.4 million in operating revenues in the first quarter of 2019.
The company reported a net loss attributable to controlling interest of $9.2 million, or 19 cents per share, which included a $2 million loss on sale of an equity method investment.
U.S. Xpress said its primary customers are in the grocery, E-commerce, consumer products, discount retail and home improvement markets with limited exposure to the automotive, manufacturing, and restaurants closed due to COVID-19.
"The company has not seen a drop in total load volume to date through April; however, the company has experienced a sequential decline in spot rates compared with the first quarter of 2020," U.S. Xpress said in a report Thursday.
U.S. Xpress said it has trimmed some of its planned capital spending in 2020, but the company has not issued earnings guidance for the rest of the year.
In response to the COVID-19 pandemic, U.S. Xpress said it has changed where and how it operates at its corporate headquarters in Chattanooga and its other facilities across the country.
During the week of March 16th. U.S. Xpress transitioned more than 1,400 employees, or over 95% of the company's corporate office staff, to a work from home. Since then, non-remote personnel have largely been limited to employees working on-site at customer locations and shop technicians working in company facilities, Fuller said.
Earlier this month, the company also began administering CDC-recommended temperature checks for anyone entering its locations, including terminals, shops and dedicated sites.
"These daily temperature checks will accompany our existing health status questionnaires to help keep our drivers, maintenance teams, vendors and customers safe," said U.S. Xpress Chief People Officer Amanda Thompson. "We'll continue to monitor and take the necessary actions to protect all those in the supply chain working to support our fellow Americans."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.